Living and working in Iceland

Transcription

1 Living and working in Iceland

2 km F F37 F72 F72 F82 F78 F28 F28 F28 F88 F98 F F Grundarhverfi Vogar Hafnir Grímsey Hvolsvöllur Hella Rauðalækur Eyrarbakki Stokkseyri Flúðir Reykholt Laugarás Hvanneyri Kleppjárnsreykir Reykholt Rif Hellissandur Grundarfjörður Búðardalur Borðeyri Hvammstangi Patreksfjörður Tálknafjörður Bíldudalur Þingeyri Flateyri Suðureyri Hnífsdalur Súðavík Drangsnes Hólmavík Skagaströnd Hofsós Hólar Varmahlíð Hrísey Grenivík Litli-Árskógssandur Hauganes Raufarhöfn Kópasker Þórshöfn Bakkafjörður Vopnafjörður Hjalteyri Kristnes Hrafnagil Laugar Reykjahlíð Borgarfjörður eystri Eiðar Fellabær Hallormsstaður Seyðisfjörður Reyðarfjörður Fáskrúðsfjörður Stöðvarfjörður Breiðdalsvík Djúpivogur Nesjahverfi Skaftafell Kirkjubæjarklaustur Vík Skógar Laugabakki Reykhólar Króksfjarðarnes Laugarvatn Ljósifoss Laugaland Árnes Brautarholt Svalbarðseyri Gjögur Lýsuhóll Laugagerðisskóli Laugar Djúpidalur Birkimelur Reykjafjörður Reykjanes Reykjafjörður Krossnes Laugarhóll/Klúka Reykir Steinsstaðir Sólgarðar Húsabakki Árskógsskóli Þelamörk Laugaland Stórutjarnir Illugastaðir Skútustaðir Hafralækjarskóli Heiðarbær Lundarskóli Selárlaug Svínafell Þjórsárdalur Seljavellir Hraun Hlíðarlaug Geysir Bláa Lónið Heiðarborg Hlaðir Brautartunga Hreppslaug Húsafell Varmaland Seltjarnarnes Álftanes Garðabær Hafnafjörður Selfoss Hveragerði Þorlákshöfn Grindavík Garður Sandgerði Keflavík Njarðvík Kópavogur Mosfellsbær Vestmannaeyjar Borgarnes Akranes Reykjavík Ólafsvík Stykkishólmur Bolungarvík Ísafjörður Blönduós Sauðárkrókur Siglufjörður Ólafsfjörður Dalvík Akureyri Húsavík Egilsstaðir Neskaupstaður Eskifjörður Höfn Húnavellir

3 Welcome to Iceland Moving to a new country takes courage. It also creates exciting opportunities and new beginnings. Taking the time to learn what to expect - and what is expected of you - will help you make the most of your opportunities. This brochure is intended to help you over the many hurdles faced when moving to a new country. This brochure answers the questions most frequently asked by those moving to Iceland. It focuses on employment and working life and aims at giving the basic facts as well as guiding you to the sources of accurate information. This brochure deals with the following topics: Introduction to Iceland... 4 Working in Iceland... 8 Taxes and workers rights Housing and cost of living Registering as a legal resident in Iceland Unemployment benefits and social security Education in Iceland Icelandic for foreigners Important contact information... 39

4 Introduction to Iceland general information $ Geography Iceland is located in the North Atlantic, and is the second largest island in Europe, with an area of 103,000 square kilometres. About 75% of the land is more than 200 meters above sealevel with most of the land being high plateaus and mountains. Glaciers cover 11,200 square kilometres while suitable agricultural land only covers 1,400 square kilometres. Only the coastline is inhabited, and there are no inhabitants in the central highlands. Climate Contrary to popular belief, Iceland has rather mild, coastal weather. The average summer temperature in the capital Reykjavik, is 10.6 C/51 F in July. The highest recorded temperature in the capital area is 24.7 C/77 F. The average winter temperature in Reykjavik is about 0 C/32 F in January. A branch of the Gulf Stream flows along the southern and the western coast greatly moderating the climate. This brings mild air from the Atlantic which in contact with colder arctic air results in a climate that is marked by frequent changes in weather and often strong wind. Furthermore this leads to more rainfall in the southern and western part than in the northern part of the island. During summer the nights are bright throughout Iceland and in June the sun in the North never fully goes down. History According to ancient written sources, the Norwegian chieftain Ingólfur Arnarson was the first permanent settler in Iceland in 874. Over the next centuries, people of Nordic and Gaelic origin settled in Iceland. Iceland went under the Norwegian king in 1262 and later the Danish king. Iceland became an independent democracy on June 17, 1944 and has a written constitution and a parliamentary form of government. The people of Iceland celebrate the 17th of June as their Independence Day. For ages Iceland was among the poorest countries in Europe and the population never exceeded people. In the 20th century the industrial revolution finally found its way to Iceland with the industrialisation of the fishing fleet. In less than a century the Icelandic society has changed dramatically, now being one of the richest countries in the world with a population of around people. Today Iceland is a highly developed country. In 2007 Iceland together with Norway ranked first on the United Nations Human Develpment Index. Iceland is also number one in Europe when comparing the competitiveness of countries according to IMD s World Competitiveness Yearbook and the world s sixth in terms of gross domestic product (GDP) per capita. Icelanders have the second highest life expectancy in the world. When a person is born he or she can expect to live for 81,8 years.

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6 Government According to Iceland s constitution, the government is divided into 3 branches; the legislative, the judicial, and the executive branches. Althingi, where laws are made and amended, is the legislative branch. Executive branches, such as the ministries, directorates and various other government agencies, carry out laws. Judicial power lies with the Supreme Court and the district courts. The president is elected by direct popular vote for a term of 4 years, with no term limit. The president s role is mostly ceremonial. Most executive power rests with the government. Althingi is the legislative body of 63 members from 6 districts, elected for a term of 4 years by popular vote. Anyone who is eligible to vote can stand for parliament. A cabinet of ministers stays in power until the next general election or a new government is formed. There are currently eleven ministers and one prime minister. The ministers usually sit in Althingi. Iceland has a universal suffrage, which means that every Icelandic citizen over eighteen can vote in the parliament election. Foreign nationals who have had legal residence in Iceland for five years can vote in local government elections. Danish, Finnish, Norwegian and Swedish citizens are though granted the right to vote after three years of residence. Only Icelandic citizens have the right to vote in national elections. Language Icelandic is one of the Nordic languages, it resembles the Norse language as it was spoken centuries ago. Icelandic is the official language and is used almost exclusively in all areas of daily life in Iceland. A large majority of Icelanders also speak English as a second language as well as Danish or another Scandinavian language. Usually a fair knowledge of these languages is a precondition for many unskilled and technical jobs in Iceland and knowledge in Icelandic is not necessarily required. Learning the Icelandic language gives you though a great advantage and enhances your chances to find a more specialised and better paid job. Information on where you can learn Icelandic follows later in this brochure. Religion Freedom of religion is guaranteed in Iceland by the Constitution. There is a State church, the Evangelical Lutheran Church, to which over 85% of the population belongs. Congregational activity is not strong and church attendance is low. Still the church plays a significant role in all major occasions in Icelander s lives. Driving in Iceland People from the EEA countries who hold a valid, standardized European driver s license are not required to exchange their license. Europeans without this type of standardized license must exchange theirs for an Icelandic license. In Iceland drivers are obliged by law to use headlights at all times day and night. Passengers in the front and back seats of automobiles are required by law to use safety belts. Be aware that outside the capital area driving conditions may be difficult. Large sections of highways are not paved and have a loose gravel surface. For more information regarding driving in Iceland contact any tourist information centre in Iceland. Or visit the site page/english which holds information on driving in Iceland in several languages. Currency and banks The unit of currency used in Iceland is the Krona, abbreviated ISK, the world s smallest currency. At the time of writing this brochure

7 (13 May, 2008) 1 = 122 ISK. Be aware that the Krona can fluctuate substantially. You can check the rate of the ISK at All banks exchange the most common currencies and it is a good idea to exchange your currency as there are very few shops in Iceland that accept foreign currency. If the banks can not exchange your currency it is likely that Forex can. Forex is located in the tourist information centre in Bankastræti 2, Reykjavik and in Turninn Smáratorg 3 Kópavogi. Forex exchange rate is though usually less favourable than the banks. Most shops and businesses accept all major credit cards. Debit and credit cards are commonly used in Iceland even for very small transactions. After you find a job you will need a bank account as most employers deposit the pay checks directly. Most banks are open weekdays from 09:00-16:00 but some have branches with longer opening hours. To find a branch near you see: www. landsbanki.is or Time The local time in Iceland is Greenwich Mean Time (GMT) all year round. In Iceland the time is one hour later than Central European time during the winter, but two hours later in the summer time. Keeping in touch with home To call to Iceland - The country code for Iceland is 354. No area code is necessary as all domestic calls are local. To call from Iceland - Dial 00 (the + sign on your mobile) for an international line, then the country code followed by the area code and finally the phone number. Sometimes the cheapest way to call abroad is to use an international calling card. For more information and key figures about Iceland see and

8 The Icelandic economy is relatively small but growth and input have been sufficient to provide Icelanders with living standards that are among the highest in the world. In 2005 the economic growth in Iceland was 7.5%, 2.6% in 2006 and 3,8% in Use of renewable natural resources such as the country s rich fishing grounds and its hydro-electric and geothermal power capacity are the most important sources of export income. Diversification is though increasing with fast growing sectors including software and biotechnology industries, financial sector, tourism and the export of fisheries know-how. With a relatively young and well-educated work force, Iceland is increasingly complementing its natural resources with industries capitalising on human resources and technology. The Icelandic labour market has for decades been characterised by a constant demand for labour. The demand has been especially high the last few years due to a booming economy, and the labour demand has mainly been met by workers from other EEA countries. Although the Icelandic economy is now going through a certain recession with decreasing labour demand we still expect a continuing demand for EEA workers in some sectors. The construction sector is estimated to slow down in 2008 and 2009 i.e. depending on lack of credit supply. On the other hand public works by the state and municipalities will increase. Around 40% of all workers in the construction sector in 2007 were non- Icelandic, the majority from other EEA countries. In the fish industry the proportion is even higher. There are drawbacks in the fish- Working in Iceland $ Iceland in 2007 Economic growth 3,8%. Employment rate 85%. Unemployment rate 1%. Foreign citizens living in Iceland constituted 6,8% of the total population and around 10% of the labour force. The largest groups of immigrants in Iceland are from Poland, Lithuania, Germany and Denmark. Minimum salary for unskilled workers was ISK (1.129 ) and the average salary was approx ISK (2.704 ). The average working hours were 42 hours per week. Average taxes on salaries: 24,4%. The main foreign currency earnings were marine products (41,8%), aluminium (26,%) transport (15%) and tourism (13%).

9 ing industry due to coda cuts and continuing rationalisations and technological advances. The tourism sector keeps expanding with continuing labour demand. Some sectors are mainly filled with foreign labour, such as horti- and agriculture, seasonal jobs in the meat industry, service jobs, etc. we do not see any signs of change there. Due to the diversification and globalization of the Icelandic economy over the past decade the demand for highly skilled specialists has become more prominent. There is excess demand for skilled engineers. Icelandic engineering companies foresee a need for a few hundred engineers in the next few years. There is also demand for skilled programmers, system administrators and skilled health personnel. If things keep on progressing along the projected lines, in the coming years, we only see an increase in the excess demand in the growth sectors and the only way to meet this demand is to increase the number of specialist recruitments from outside of Iceland. All in all, we expect a continued demand for EEA workers on the Icelandic labour market. The main elements of uncertainty are further large scale investment and infrastructure projects, conditions on international financial markets and the currency exchange rate. You can always see some of the available vacancies in Iceland on EURES websites: and If you are looking for work in a specific profession you can also contact the EURES office and our advisers will help you get in contact with relevant companies. A list of the most needed professions in the Icelandic labour market is regularly updated on our website: Finding a job in Iceland There are a number of ways to go about job searching, but it is a good idea to start looking for a job before you move to Iceland. Visiting the EURES Job Mobility Portal is a wise first step: www. eures.europa.eu > search for a job. The portal contains great variety of job opportunities. The website also contains general information on living and working in Iceland and information about the current situation on the labour market. You will find complementary and more specific information on the Icelandic EURES website: For all EURES job vacancies in Iceland, you are requested to fill out an on-line application form at Make sure you fill out the form thoroughly to give the most accurate description of you and your qualifications. It s important that you list all previous work experiences and education, both in your home country and abroad. It is vital that your contact information is accurate and telephone numbers and addresses active. In case you have made a CV you can attach it to your form. Still you should fill in all the fields in the form as it enables EURES to find your application when a job that meets your qualification becomes available. The form must be filled out in English. Please do not use ordinary mail as it is simply too slow. When you have filled out and submitted the application form you are welcome to contact the Icelandic EURES advisers at eures@ vmst.is to discuss your job opportunities. Your local EURES adviser can also assist you. To find your local EURES office, go to: > EURES advisers. Below are some other ways to search for a job in Iceland. For best results, you may wish to use all of the methods listed below. Private employment agencies [ráðningarþjónustur]: You may, free of charge, register with one or more employment agencies.

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11 They will tell you what information you need to have readily available. For instance, a curriculum vitae/résumé, certificates, diplomas and references. Employment agencies are listed later in this brochure. Read the [classified] advertisements section in the local newspapers The three largest papers in Iceland are Morgunblaðið ( Fréttablaðið ( and 24 stundir ( The employment section (Atvinna) comes out on Sundays in Morgunblaðið and Fréttablaðið, but there are often daily advertisements. Sometimes it pays to put in your own advert for employment. Note that most job advertisements are in Icelandic. Speculative applications: If you know what kind of business you want to work for you may want to send them your application with CV, call them directly or visit them and ask if there are any positions available. Also visit their website where open vacancies within the company are often listed. EURES can also help you find suitable enterprises. Contact local branch of your professional or trade union (stéttarfélag): They have information on the current employment trends within your profession and can give advice on where to start looking. Contacts: Tell everyone you know in Iceland that you are looking for employment. Word-of-mouth via family and friends often gives good results. Are your diplomas valid in Iceland? Before travelling to Iceland, it is wise to find out which jobs are open for persons with your qualifications. You can also have your diploma assessed for equivalence and recognition in Iceland. The basic principle is that valid qualifications to practice a certain profession in your homeland are also valid in other EU/EEA countries. Higher degrees, 3 years of studies [BA, BSc, BS] and vocational studies with a secondary school education, should be recognized all over the EU/EEA. The Ministry of Education, Science and Culture is responsible for coordination of recognition procedures in Iceland. The ministry does not process all applications for recognition. Individual ministries handle the recognition for their respective spheres, for instance the Ministry of Health is responsible for recognition for medical and health professions. The best place to begin collecting the information you need is the website: An assessment of equivalence of your diplomas will make it easier for Icelandic employers to evaluate your knowledge and skills. It may also help you to get a better job with higher pay. However, lack of Icelandic language skills will limit your options for a qualified job considerably. Europass Europass is a standard folder that helps people to make their skills and qualifications clearly and easily understood around Europe. Europass consists of five documents: two documents (Europass curriculum vitae (CV) and Europass Language Passport) you can fill in yourself; and three other documents (Europass Certificate Supplement, Europass Diploma Supplement and Europass Mobility) filled in and issued by competent organizations. Europass is supported by a network of National Europass Centres, you will find a link to the Europass office in Iceland at You can find more information about Europass and your local Europass Centre at: Curriculum Vitae/Résumé In Iceland the usual practice is to enclose a resume/cv with your job application. The CV should preferably fill just a single page. 11

12 Most people attach a photo, and while that is optional it may help. While the details provided in CVs vary a great deal here is a list of the information that should be included. The information should be in reverse chronological order (most recent information first). Personal details - name, address, telephone numbers, address, date of birth and marital status. Education - this section contains your formal qualification. It should include when you studied, the name of the school, degree, and in what area your degree is. Work experience this is a very important part of your resume. Include a brief description of each job/position, name of the company and when you worked there. Other qualifications here you should mention your language skills; spoken and written. You can also describe you computer skills, wether and what kind of drivers licence you have and other relevant qualifications. Positions of trust/personal interests describe in a few lines non-professional interests and leisure activities. If you have lived abroad before by all means mention it. References it is very important to name at least two people that will give you a good referral. State the names, job title, telephone numbers and s for these individuals. Contact your referrals and make sure you have their approval. You can find an example of an Icelandic CV at Cover Letter When you send in a job application or a CV you should also include a cover letter. The letter should not be longer then one page. Your cover letter is an important marketing tool which highlights your most attractive qualifications as a potential employee. While you may use the same CV for every job you are applying for you should write a different cover letter for each job you apply for. Consider the following when writing the letter: If you are responding to an advertisement be sure to read it carefully, and make sure you respond to what it asks for. Explain why you want this particular job. Make it clear to the recipient that you are familiar with the company, the required qualifications and furthermore, how you satisfy these. The Job Interview Most Icelandic employers using the EURES service make their recruitment decisions after few telephone conversations and correspondence with the applicants. For those that are already in Iceland when job hunting the norm is to be called in for an interview. Whether you are interviewed in person, over the phone or by , the interview provides a good opportunity to ask questions concerning aspects of the job. For instance, what is the job description? Does the job entail a lot of physical activity? How long is the workday? Starting and finishing times, lunch and coffee break schedules, etc. Also, ask what the salary is, both for normal working hours and overtime, and when salaries are usually paid. Do not be afraid or hesitant to ask questions. It is also a good idea to acquaint yourself with the company and its practices to be better prepared for the job interview. The Job Application For most unqualified and blue collar jobs, employers in Iceland use standardized application form to screen potential employees. You find these application forms on the job agencies websites. The forms are usually only available in Icelandic except the EURES application form Employers use the application to determine who they are going to call for a job interview so you should be careful to fill it out correctly. 12

13 JOB AGENCIES EURES European Employment Services Engjateigi 11 Tel.: Vinnumálastofnun Public Employment Services There are EURES Recruitment Officers in all PES branches Reykjavik area: West Iceland (Akranes): Westfjords (Ísafjörður): North West Iceland (Blönduós): North East Iceland (Akureyri): East Iceland (Egilsstaðir): South Iceland (Selfoss): South West Iceland (Reykjanesbær): Capacent (Vacancies for specialists) Borgartún 27 Tel.: Ninukot (Jobs in agri- and horticulture, tourism and child care) P.O. Box 12015, 132 Reykjavik Tel.: / Ráðningarþjónustan ehf. Krókhálsi 5a Tel.: Vinna.is Borgartúni 27 Tel.: monika@vinna.is 13 Job.is (job agency on-line) Tel.: Strá MRI Suðurlandsbraut 6, 4th floor Tel.: HH Ráðgjöf Fiskislóð 81 Tel.: Hagvangur Skógarhlíð 12 Tel.: Ábendi ehf. Bankastræti 5 Tel.: abendi@abendi.is Starfatorg Vacancies within the public sector Starf.is Hlíðasmári 15, Kópavogi Tel.: starf@starf.is Mannval Tel.: mannval@mannval.is Student Employment Office Recruitment agency for young people, years old Vinnumiðlun ungs fólks Hinu húsinu, Pósthússtræti 3-5 Tel.: vuf@vuf.is Reykjavík Working for the municipality > Störf í boði Talent ráðningar Hendur ehf

14 Taxes and workers rights $ Everyone working in Iceland must pay taxes. The taxation system in Iceland is a PAYE system (Pay-As-You-Earn). Employers are required to calculate and deduct taxes from all salaries and wages paid out to employees. There is one main income tax bracket which in 2008 is 35.72%. All those with a tax card are entitled to a personal tax credit of ISK per month. This means that usually about 27% of your wages goes to taxes after the personal discount. Income under ISK a month is free of income tax. The Internal Revenue (Ríkisskattstjóri), issues tax cards. Applicants must have an identification number (kennitala), and be prepared to show personal identification with a picture. In order to have the right amount of tax deducted, you have to give your employer your tax card. To receive a tax card go to your local or inland tax office. You find their addresses at > International > Addresses. Example showing how tax is calculated Salary for one month % deduction of pensions premium Taxable income Tax rate 35,72% x Personal tax credit Withholding tax Paid salary after taxes If you work on a farm, room and board is a part of your salary and is also subject to taxes. Other deductions from your salary are union dues 1% and pension premium 4% (the employer then pays an extra 8% to your pension fund). For every year you work in Iceland you must fill out and submit a tax return. It is usually due in March each year. When leaving Iceland you are also expected to send an income report to the tax authorities a week before you leave. This is done because your final taxes must be calculated, in some cases there may be a partial refund. Final assessment takes place on the basis of the tax return in the end of July the year following the tax year. If your withholding tax was higher than your assessment you will get a refund, and if you did not pay enough you must pay the difference. If you have an agent in Iceland who can claim your tax refund or pay for you the residue, he must have a written permit from you to receive the payment. If you do not turn in a tax return, the tax authorities estimate your income and tax you accordingly. This esti- Internal Revenue (Ríkisskattstjóri) Laugavegur Reykjavík Tel.:

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16 mation is usually high and can cost you dearly. To avoid a bill from the Icelandic tax authorities later on when you have returned home make sure your tax return is sufficient. Most people nowadays do their tax return on-line and it is quite simple as a lot of the information is filled in advance by the authorities. Instructions are also available in many languages on the Internal Revenue webpage: > international. Those who need assistance with understanding or completing their tax return should contact their trade union or the Intercultural center. It is also possible to speak to the local tax authority or the Internal Revenue Directorate (Laugavegur 166). You can also seek the help of registered auditors (many Icelanders do so) but be aware that you need to pay for their service. Workers rights and labour laws In Iceland the collective agreements between unions and employer s associations are generally binding, which means that they also apply to non-union members. 90% of the labour market is covered by collective agreements. Wages and other terms of employment concluded in collective agreements are legal minimum terms. Salaries lower than what is stated in the collective agreement are illegal. The minimum wage depends on both education and work experience, e.g. the minimum wage for a qualified and experienced carpenter is much higher than for an unskilled worker. Therefore make sure that you have all papers on your education and/or work experience and that you are getting paid accordingly. You can find a link to your union where you find further information on terms of employment at The common practice is though that people negotiate individually with their future employers about their salaries and other terms of employment, these wages are called market wages because they are determined by supply and demand on the labour market. Most people that work in the private sector earn closer to market wages than the union rates. According to the union rates the minimum salary for unskilled worker is ISK (1,129, (May 2008)) per month for full time job. As you can see on the table below, the difference between union rates and market salaries can range significantly. Learning the Icelandic language substantially increases your career options and earning possibilities. Union rates versus market wages (per month) few examples Union rates Market wages Labourers Tradesmen Nurses * Engineers ** 1 = 122 ISK 13 May 2008 *Wages include regular overtime and shift differential. **Engineers with masters degree and five years of work experience. Below are some outlines of the basic rights of workers: Contract of Employment Workers are entitled to a written job contract no later than two months after first day of employment. A verbal contract is legally binding the first two months. The contract should include the type and place of work, the hours, a short job description, wages, vacation pay, paydays, and the job ratios. It is illegal to work without a contract. You can find a job contract in English at 16

17 Pay Statement (payslips) Collective agreements require that payment of wages must be accompanied with a written pay statement (payslip). Here is an example how a payslip should look like: Overtime A full time job is 173,3 hours per month or approximately 40 hours a week. If you work more than these hours you are entitled to overtime pay. For one hour overtime you get 80% extra on your regular pay. For example if you get 1000 ISK per hour, you get 1800 ISK per hour when you are working overtime. Periods of rest Workers are entitled to a minimum consecutive period of 11 hours of rest during each 24- hour period and at least one day of rest per week immediately succeeding the daily minimum period of rest. Vacation pay (orlofslaun) The general rule is that you are entitled to two vacation days for each month worked. In all wage contracts, there is a clause concerning holiday allowance. The holiday allowance should be calculated at the time of each wage payment. The minimum amount is 10.17% of your basic salary. There are four ways in which your vacation wages can be paid. The money can be paid each month into a If you are in doubt or suspect that you are not being treated fairly by your employer you should turn to your union, the EURES office or the Intercultural Center. special bank account (orlofsreikningur). You can keep track of the amounts as they are shown on your monthly payslip. Secondly, the money can be paid with the last paycheck you receive before you take your vacation. Thirdly, you receive your normal salary while on vacation. For those who have worked overtime over the year, extra vacation pay can both be paid into your account or be paid when your vacation starts. The fourth way is to get the money paid in one lump sum when your contract is over or when you stop working for that company. It is not advisable to have your vacation pay paid as a part of your monthly wages. Work during public holidays When you work during public holidays you should be paid overtime which is 80% extra to your daytime wages. For other major holidays there is yet another wage schedule (stórhátíðarkaup). If you work on Christmas Day, Easter Sunday, New Years Day, White Sunday/Pentecost or the 17th of June, 17

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19 ask what your wages should be as they are sometimes considerably more. The same applies if you work after 12:00 pm on Christmas Eve and New Years Eve. It should be noted that the rules on working hours and salaries paid on legal and contractual holidays may be different for those who work on shifts. For shiftworkers, there may be a special shift bonuses paid in addition to the fixed salary. There may also be special conditions regarding winter vacations. Remember that the wage schedule agreed upon by your union only state the minimum wages and conditions, and therefore you can not legally be hired for lower wages than those stipulated in that agreement. On the other hand, it is possible for an individual to negotiate higher wages and better conditions. Flat Wages (jafnaðarkaup) Some employers offer a flat wage, that is, they pay the same rate no matter whether you work, day, nights or weekends. Flat wages are not part of the minimum wage agreement package and are illegal. In most cases, it is slightly more than minimum wage for regular day wages, but not as much as the overtime rate. Individuals should be careful to ensure that the salary offered is in accordance with the minimum wage. Remember that it is illegal for employers to pay anything less than the minimum wage and it is, therefore, not advisable to accept any such offer. If after pointing this out to the employer, he does not change his offer, contact your union or The Icelandic Confederation of Labour (Alþýðusambandið). salary (4%) and the employer s contribution is 8%. Pension funds are transferable between EEA countries and are paid in the country of residence by the time of retirement. The employee may also choose to have a voluntary private pension saving (viðbótarsparnaður) in which the employee pays 4%, the employer pays 2%, and the state pays an additional 0.4% in the form of a tax discount. For information regarding pension funds visit: Sick Pay and Compensation for Accidents occurring while on the Job From the first day of employment, the employee has the right to receive daily wages for up to three months after a work related accident (vinnuslysalaun). Work related injuries include injuries occurring while working, while running errands connected your job and also on the way to and from work. To receive sick pay you must have worked for at least one month for the employer. After one month the employee has the right to two paid sick days every month. The amount of sick days increases after 2, 3, and 5 years worked for the same employer. For further information see: Instructions on occupational health and safety in Iceland can be found in many languages on: www. vinnueftirlit.is/is/utgafa/fraedslu-_og_leidbeiningarrit Pension Funds In Iceland it is mandatory to pay to a pension fund. The employee pays a percentage of his Termination of Employment The Icelandic labour market is flexible when it comes to recruiting and laying 19

20 off staff. Both employers and workers are though subject to notice periods. The notice periods vary between unions and also depend on the length of employment. The general rule is that if you have worked less than three months the notice is one week, a month if you have worked for 3-6 months and 3 months if you have worked for longer than 6 months. Termination should always be accompanied by a written letter. Your union can give you more detailed information about their notice period rules. You find their addresses on: EXCEPTION The above does not apply in the case of temporary employment with a specific period of employment specified in the contract. Termination cannot take place unless both parties agree. If you are dismissed before your contract is finished, contact your trade union. Shop Steward or Union Confidant (trúnaðarmenn) Companies that employ five people or more usually have one employee who acts as a liaison officer between the union, the company s management and employees. This representative should have all the information concerning the rights and obligations of employees. He or she also sees to it that all rules are being adhered to. If you have any questions about your rights or obligations it is a good idea to discuss them with the union confidant at your workplace. If there isn t any such person that you know of you can contact your union, the EURES office or the Intercultural Center (Alþjóðahús) for assistance. Public holidays There are 15 public holidays in Iceland. They are called red days as they are marked in red on Icelandic calendars. For more information about labour laws contact the The Icelandic Confederation of Labour The confederation has published brochures about workers rights in 9 languages. These brochures as well as ASI s handbook, Icelandic Labour Law, A Summary of Basic Rights and Obligations on the Private Labour Market can also be found on Don t forget: To save all your pay slips and to make copies of your time card. That your union contract only insures your minimum rights. To request membership in your union in writing. Just because you are paying dues doesn t always mean that you are enrolled. That your union membership entitles you all kinds of service from the unions, such as legal assistance in labour disputes, vacation housing, reimbursements for language classes, professional training, and discounted prices at sports clubs. To look over your pay slip and to ask questions if you don t understand what the deductions are for. The usual deductions are for vacation pay, union dues, taxes and pension funds. Do not hesitate to ask questions regarding your rights. If you have inquired at work, called your union and you are still not sure, call The Icelandic Confederation of Labour (Alþýðusambandið) tel , The EURES office tel.: , The Multicultural and Information Centre (Fjölmenningarsetur) tel.: or The Intercultural Center (Alþjóðahús) tel.:

21 Housing and cost of living $ While it is of course best to secure accommodation before you move to Iceland this may not always be possible. If you need a temporary accommodation during your first days in Iceland, a guesthouse or youth hostel may be the best short term solution while you are looking for a more permanent housing. The cheapest options are the Youth Hostel Sundlaugavegur 34, 105 Reykjavik, tel.: (354) and the Salvation s Army Guesthouse Kirkjustræti 2, 101 Reykjavík, tel.: (354) The minimum price for one night is around 18 (Summer 2008). For a listing of hotels and guesthouses in Iceland go to: Rental Housing The Icelandic market for privately owned homes and apartment flats is large, around 75-85% of the housing stock. The market for rentals is therefore limited. Rent in Reykjavik and the capital area is generally more expensive than in other areas. To find an apartment you may want to use all of the tips below. Put up advertisements you may put up an ad saying that you are looking for a flat on billboards of universities, supermarkets, local kiosks, community centres, health care clinics and any other public notice boards. Also read the advertisements there and see if there is any accommodation available. Word-of-mouth Tell everyone you know, even people you work with that you are looking for an apartment. Often apartments for rent are not advertised in the papers as they are rented through acquaintances before people get the chance to advertise them. Use the internet The following websites that are connected to the newspapers have listings that are updated daily. These ads are all in Icelandic. Look for Húsnæði í boði on the following sites: and Use online rental agencies and Note that all these websites are in Icelandic. Advertise in the newspapers for a small fee you can place an ad stating that you are looking for a room or an appartment. Use the rental agency Leigulistinn - in exchange for a monthly fee of ISK this agency provides their customers with a current list of available housing for rent. Call everyday and ask if there are any new listings. Leigulistinn, Skipholt 50b, 105 Reykjavík, tel.: (354) , When renting a house or a flat it is usual to pay a month in advance and a security deposit. You should always have a written, signed lease. For more information on leases or to print out a lease in English, Polish or Icelandic, go to: 21

22 Rent Subsidies (Húsaleigubætur) All those who are renting a flat, have signed a lease for at least 6 months, and are at least 18 years of age may apply for compensation. Application forms are in the reception areas of your local Social Service Office (þjónustumiðstöð). Each application is valid for one year, therefore, applications must be renewed annually. There are social service offices in all municipalities in Iceland and several offices in Reykjavik. For information about your Social Service Office call Or visit Social Advisory Services. Further information: Note: If you rent in an industrial complex or some other form of housing that is not a legal residential area you will NOT receive rent subsidies. Social Welfare Flats /Public Housing It is possible to apply for rental housing through the municipal authorities. The term for these apartments is félagslegar leiguíbúðir or social welfare flats. These apartments are intended for citizens who are experiencing socio- and economic hardships. There are certain conditions for getting this kind of housing and they can vary from one municipality to the next. The applicant must have had a legal residence in the municipality for a period ranging from 6 months to three years and there is also an upper limit for both income and assets. To apply visit your local Social Service office. Further information: Public Housing. Buying a Flat All those who have a residence permit may buy a flat in Iceland. For more information on purchasing a home contact your bank or 22

23 the State Housing Finance Fund (Íbúðalánasjóður).Their website has information in English, Polish, Serbian, Croatian and Danish. Íbúðalánasjóður Borgatúni Reykjavík Tel.: You should never sign your name to anything unless you understand, completely what you are signing. Cost of living The minimum cost of living for one induvidual per month is around ISK (902 (May 2008)). You should expect to pay ISK a month for renting a single room with access to kitchen and bathroom. For a small apartment you pay at least ISK a month. The avarage price per square meter is about ISK in the suburbs but higher in the downtown area. The supermarkets Bónus and Krónan usually offer the lowest price on food. Here is a short list of average prices of some every day items in the capital area. Bread (1 kg.)...1,30 Milk (1 l.)...0,69 Coffee (500 gr.)...2,12 Bread cheese (1 kg.)...8,75 Chicken (1 kg.)...3,25 Red apples (1 kg.)...1,30 Onion (1 kg.)...0,53 Beer (1 pint in winestore)...1,55 Big Mac meal (with drink and fries)...6,80 Hot dog fram a stand...1,80 Bus ticket... 2,30 Reykjavík area bus card: 3 months:...104,00 1 month:...45,90 Gasoline (1 l. 95 okt.)...1,30 Note: The numbers are from May 2008, 1 = 122 ISK. Income, cost of living figures and the rate of Euro can vary from time to time. 23

24 Registering as a legal resident in Iceland $ A citizen of an EEA/EU country (except for Romania and Bulgaria) may stay and work in Iceland for up to three months from arriving in the country, or stay for up to six months if seeking employment. In addition Swiss and Faroese nationals can work in Iceland without a work permit. If you intend to stay longer than three moths you must apply for a residence permit. It is recommended that you do so directly after arrival in Iceland or as soon as you have found a job. The conditions for receiving a resident permit for an EEA citizen are that you can provide for yourself. To apply for a residence permit go to The Directorate of Immigration (Útlendingastofnun) located at Skógarhlíð 6, 105 Reykjavík. You can also print out the application form and find related information at All EEA/EU citizens are free to set up a business in Iceland. See: The 30 EEA countries are: Austria Belgium Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Iceland Ireland Italy Latvia Liechtenstein Lithuania Luxembourg Malta Netherlands Norway Poland Portugal Slovakia Slovenia Spain Sweden United Kingdom (Bulgaria and Romenia)* *The Icelandic government has decided to apply temporary restrictions for citizens from Bulgaria and Romania. The restrictions will be in effect at least till 1st of January This means that Bulgarian and Romanian citizens need work permit to work in Iceland. Information on work permits: 24

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26 When you apply for a residence permit you will need to submit the following: A completed application form for a residence permit signed by the applicant. The Directorate of Immigration Útlendingastofnun Skógarhlíð Reykjavik Tel.: A valid passport, the validity of the passport must extend at least three months beyond the expected stay in Iceland. 1 passport-size photo Icelandic Personal ID Number - kennitala Verification of employment a copy of your signed contract of employment. This should include the duration of the contract and whether it is a full or part-time employment. You will be asked to present proof of health insurance. This is done with an E-104 certificate issued from your home country. If you are not eligible for this insurance you may purchase a 6 month health insurance package at most private insurance companies in Iceland. Confirmation of school admission when applying for a residence permit for the purpose of studying. Certificate of custody when applying for a child younger than 18 years old. When the application has been processed, the applicant will be informed by a written notification. The average processing time is about 60 days. The fee for a first permit of a person over the age of 18 is 4000 ISK and 2000 ISK for persons under the age of 18. Your application will not be processed until it has been paid for. A first-time residence permit for an EEA/EU foreigner is usually issued for five years. However, if the job contract is for longer than three months, but shorter than one year, the permit is issued for the corresponding period. A first-time permit for a dependant family member of an EEA/EU foreigner will be issued for the same period of time as the wage-earner s permit. EEA citizens do not need a work permit. Non-EEA citizens married to EEA citizens are also free to move to Iceland, but must have a work permit before taking up employment. Residence Permits for Children under 18 Only legal parents or guardians may apply for children under 18 years of age. When applying for a residence permit for a child under 18, the applying parent or guardian must show proof of housing that meets requirements concerning the number of individuals in residence. The parent needs to show sufficient income to provide for himself and the child. A parent who applies for a residence permit for a child needs to earn at least ISK per month. Couples need to earn ISK per month. Children born in Iceland Children of foreign citizens born in Iceland do not automatically receive a residence permit; this needs to be applied for after the birth of the child. It is very important to do this, especially in cases where the child is taken out of the country, e.g. on summer vacation to the parents country of origin. Children who have not attained citizenship must have a residence permit in order to reenter the Schengen area. REMEMBER TO RENEW YOUR RESIDENCE PERMITS BEFORE THEY EXPIRE. 26

27 What should I do first after entering Iceland? 1. Visit the EURES office: There you get help and advice on finding a job and appartment, applying for an ID number (kennitala) and other necessary formalities. 2. When you have found a job: Sign a contract of employment (see example on After receiving a kennitala you can open a bank account. Apply for a tax card. Apply for a residence permit. Make sure that you know your rights. For instance are you being paid the correct wage? 3. When you find an apartment or place to live be sure and fill out a change of address form at the national Registry: If at any time you need help or information contact the EURES office ( or the Intercultural Center/Alþjóðahús ( 27